Meta's Muse AI agent pressures online travel stocks, Truist comments

Investing.com -- Meta Platforms' (NASDAQ: META) newly launched AI agent Muse has put pressure on online travel agency stocks due to the application's ability to book travel, according to Truist analysts.

The firm noted that while previously launched large language models appeared to have limited impact on bookings share, Meta's entry presents greater downside risks to OTAs given the company's strong consumer position, large scale and data resources, and Muse's initial download momentum reported by CNBC.

Truist said the extent to which Muse or other AI agents will affect OTA bookings share, commission rates, or competitive positioning with travel suppliers remains highly uncertain. The firm expects media attention and widespread testing to influence investor sentiment before clear financial impact data becomes available.

The analysts expressed particular caution on Expedia Group (NASDAQ: EXPE), noting that Muse's launch is beginning in North America where Expedia's business-to-consumer operations are two-thirds U.S.-based, compared to Booking Holdings' total U.S. booker mix in the low teens percentage range.

Truist pointed out that U.S. travelers show strong brand loyalty, as evidenced by most U.S. hotels being affiliated with major chains, high direct bookings rates reaching 70% to 80% in some cases, and robust loyalty programs with credit card partnerships for both hotel and airline brands as well as OTAs.

The firm said OTA communication about these emerging platforms will matter for near-term stock performance. When Expedia's CEO was asked at the Skift Global Forum last week about working with Muse, no specific details were provided. Expedia announced joining Muse through a social media post last Tuesday afternoon, according to FactSet.

Truist maintains a Hold rating on Expedia and a Buy rating on Meta.

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